What Is the Impact of Amazon’s Prime Day 2020?

Amazon Prime Day debuted on July 15, 2015, as a way for e-seller Amazon to boost sales during what is typically a slow sales period. The annual campaign is targeted towards Amazon Prime members who pay as much as $119.00 per year for the privilege and benefits of an Amazon Prime membership. In the initial five years, Prime Day consistently impacted Amazon’s dominance in the e-market with year-over-year increases in sales during a relatively dormant selling period and caused major competitors to rethink marketing calendars. But 2020 brought chaos, dysfunction, and massive disruptions to marketers across the entire spectrum of commerce when the COVID-19 pandemic burst upon the world scene.

Delayed several times from its original July 15 time slot, Prime Day 2020 finally came to pass on October 13 and 14, 2020, amid more than a few dire predictions for success. The move forward in the event placed it closer to the beginning of the Christmas holiday selling season and on the threshold of a Presidential election. “It’s a crazy time to try to launch anything publicly because of the election, just because of the amount of attention sucked up in the media environment,” said Hilding Anderson, Senior Director of Strategy & Consulting at Publicis Sapient. “We see a high degree of noise and distraction in advertising and promotions.” Questions about the campaign’s likeliness of success or failure, during the slow emergence of consumers from the sequester of the pandemic and the immediate support for small brick and mortar retailers, were not insignificant. So, how did Prime Day 2020 fare?

Preliminary results indicate that Prime Day 2020 generated $3.5 billion in third-party revenue, and an overall increase of 36 percent in sales over the 2019 event. While impressive, these numbers are not reflective of many third-party sellers’ experiences who reported that the increased numbers came at an increased cost of advertising and promotion, leading some sellers to complain that the increased gross numbers came at a detriment to net profits. “Market intelligence firm Numerator found that the average Amazon customer order size on Prime Day was $44.21, and 56 percent of consumers who shopped Amazon placed more than two orders. However, 45 percent of orders were under $20. The average order was $59.02 in 2019.”

Moving the event closer to the start of the holiday shopping season also creates some controversy over comparing this Prime Event to any other previous Amazon Prime Day. It can be argued that moving the 2020 event into a more robust sales period negates the validity of any comparison. It is essentially comparing apples to oranges. The relocation of the event may be seen as an early start to the holiday selling season and less of an event that produced increased sales in a period of diminishing revenues.

A Numerator’s consumer survey found that coming holiday shopping is just getting underway and is not over despite 29 percent of Prime Day buyers reporting that Prime Day 2020 purchases were destined for gift giving. According to eMarketer forecasts, e-commerce sales in the United States is predicted to increase by as much as 17 percent or $190 billion. A big increase in the purchase of gift cards by Prime members during Prime Day may suggest that members are not done contributing to Amazon’s end-of-year sales revenue.

As with many aspects of marketing tactics during the unprecedented pandemic, evaluating the real effectiveness of any single marketing campaign may more accurately be judged in hindsight!